When you think of Kickstarter success stories, Pebble immediately springs to mind. After raising $10 million off the back of the first crowdfunding campaign, the company returned with the Pebble Time, Pebble 2 and Pebble Round – returning to Kickstarter at various points in the journey.
But if a report in The Information is to be believed, there’s a cautionary tale to such runaway success. The company, which was forced to lay off 25% of its staff earlier this year, is set to be bought by Fitbit for “a small amount”, with further Pebble smartwatches unlikely in the future. The report suggests that Fitbit is interested in Pebble purely for its intellectual property and software, and has no interest in continuing to make smartwatches.
How much is a small amount? A source told TechCrunch it would likely be between $34 and $40 million – an amount that is allegedly “barely covering their debts”. As is often the way in these stories, it sounds like Pebble could have gone for a lot more if the company had been willing to sell earlier – the same source told TechCrunch that it was subject to a $740 million bid from watchmaker Citizen back in 2015, and another $70 million approach from Intel earlier this year.
But times are tough for smartwatch makers everywhere. Everyone is struggling to sell smartwatches. But with hindsight the numbers look especially bad for Pebble – a company that sells nothing else. While everyone (bar Garmin) was seeing their sales shrinking, Samsung, Lenovo and Apple had other more profitable strings to their bow. Pebble held 3.2% of the market back in October, and had seen a year-on-year decline of 27.2% in its only product.
The world of tech can be brutal. Especially when bigger companies invade your very crowded patch – as Pebble found when Apple, Microsoft, Samsung, Lenovo and others launched their own smartwatches after the company proved demand on Kickstarter.
At the moment, of course, this is just a rumour. We’ll update as we learn more.